Chapter 6 - Double entry Bookkeeping

Question 1

What does it mean by Debit and Credits ?

Answer 1

They both are terms which refer to the increase or decrease of something. However when they are used is determined by the account type

Question 2

What are the 5 different account types ?

Answer 2

Revenue
Expenses
Assets
Liabilities
Equity

Question 3

What does the DEAD CLIC accronym refer to ?

Answer 3

D - Debit
E - Expenses
A - Assets
D - Drawings

If any of these increase then it is noted as being a debit action

C - Credit
L - Liabilities
I - Income
C - Capital

If any of these increase then it is noted as being a Credit action

Very important note is that is any of these headings to the oppsite it is noted by the opposing actions
e.g Decrease in assets is a credit